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7 April, 01:55

Tibbs Inc. had the following data for the most recent year: Net income = $300; Net operating profit after taxes (NOPAT) = $220; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Total operating capital = $2,300. What was its return on invested capital (ROIC) ? Select the correct answer. a. 10.47% b. 10.17% c. 9.57% d. 9.27% e. 9.87%

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  1. 7 April, 05:22
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    Option (c) is correct.

    Explanation:

    Given that,

    Net income = $300

    Net operating profit after taxes (NOPAT) = $220

    Total assets = $2,500

    Short-term investments = $200

    Stockholders' equity = $1,800

    Total debt = $700

    Total operating capital = $2,300

    Return on invested capital:

    = (Net operating profit after tax (NOPAT) : Total operating capital) * 100

    = ($220 : $2,300) * 100

    = 0.09565 * 100

    = 9.565% or 9.57%
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